BRICs

We look at two current contrasting cases of monetization of gold — one is honest and promotes monetary soundness and stability, the other is dishonest and promotes further financial and monetary crisis. Can you guess which form is being executed by the lay public, vs. the monetary authorities and big banks?

There has been a lot of well-meaning talk about the “threat” of China dumping the dollar, with precious little discussion of potential mechanisms. Here I expound on a a ZeroHedge piece that just came out announcing China’s expanded Yuan settlement facilities, which imply China is actually well underway on its path to explicitly driving the stake into the heart of the dollar once and for all. It is only a matter of time until we arrive at wholesale regime change for the dollar-dominated international trade system.

I’m surprised how persistently I see the dubious assertion that the Chinese “can’t away from the dollar because they own so many of them”. A related argument is that they are “stuck in dollars because of the trade deficit”. They certainly can move away from the dollar, though, and to do so, all they need to do is keep doing what they are already doing, and they will soon be positioned for a major transition.